Shawn Mercer discusses longevity risk
Listen to the interview on the Business Innovators Radio Network: https://businessinnovatorsradio.com/interview-with-shawn-mercer-founder-of-mercer-financial-group-discussing-longevity-risk-outliving-your-savings/
In this episode of Influential Entrepreneurs, host Mike Saunders welcomes back Shawn Mercer to discuss the critical topic of longevity risk and strategies to avoid outliving your savings. The conversation highlights the growing concern among individuals regarding financial security in retirement, especially as life expectancy continues to increase due to advancements in healthcare and nutrition. Shawn emphasizes the importance of reassessing actuarial tables that may no longer reflect current realities, as retirees may need to plan for 15 to 20 years longer than previous generations.
Longevity risk is becoming an increasingly pressing issue for retirees, as many individuals are now expected to spend 20 to 30 years in retirement. This extended lifespan necessitates careful financial planning to ensure that retirees do not outlive their savings.
Understanding Longevity Risk
As discussed in the podcast episode, the fear of outliving one’s savings is a prevalent concern among retirees. Research indicates that a significant percentage of retirees—approximately 65% to 67%—view this as their primary worry. This fear is compounded by the fact that people are living longer than previous generations, thanks to advancements in healthcare, nutrition, and overall living conditions. For instance, retirees today may find themselves living into their 90s, which can stretch their financial resources thin if not properly managed.
Shawn explained: “To mitigate longevity risk, it is crucial for retirees to engage in thorough financial planning. This involves assessing their current financial situation, understanding their expected lifespan, and determining how long their savings need to last.”
Key Considerations in Retirement Planning
Budgeting: One of the first steps in effective retirement planning is establishing a clear budget. Retirees should identify their essential expenses and understand their fixed costs. This foundational step allows them to determine how much income they will need to cover their living expenses throughout retirement.
Social Security and Pension Plans: While Social Security benefits can cover a portion of retirees’ expenses, they are often insufficient to sustain their desired lifestyle. Therefore, creating a guaranteed pension plan can help cover any shortfall, providing a more stable financial foundation.
Investment Strategy: The podcast emphasizes the importance of diversifying investments across different asset classes. By employing a “bucket strategy,” retirees can allocate their funds into various categories designed to perform over different time horizons. This approach allows for a balance between growth and security, helping to ensure that funds last throughout retirement.
Healthcare Costs: Another critical aspect of longevity risk is the potential for extended healthcare needs. The discussion points out that many retirees may face significant healthcare expenses, including long-term care, which can be financially devastating if not planned for. It is estimated that around 70% of individuals will require some form of long-term care, making it essential to factor these costs into retirement planning.
Flexibility and Adjustments: As life circumstances change, retirees may wish to make significant purchases, such as buying an RV or taking a family cruise. It is important for retirees to have a flexible plan that allows for adjustments. Financial advisors can help retirees understand how to withdraw funds from their investments without jeopardizing their long-term financial health.
In conclusion, longevity risk is a significant concern for retirees, and careful planning is essential to avoid outliving savings. By establishing a clear budget, understanding the role of Social Security and pensions, diversifying investments, preparing for healthcare costs, and maintaining flexibility in their financial plans, retirees can better position themselves for a secure and fulfilling retirement. Engaging with a financial advisor can provide the necessary guidance to navigate these complexities and create a personalized retirement strategy.
About Shawn Mercer
Mercer Financial Group is a full-service financial services firm committed to helping individuals, families, and business owners build confident, sustainable financial futures. Based in the Wichita Metro Area and proudly serving clients nationwide, we specialize in personalized retirement planning and long-term investment strategies designed to balance growth with safety.
With a comprehensive suite of services—including retirement plan design, portfolio management, and access to a wide range of investment options such as stocks, bonds, and other diversified assets—Mercer Financial Group provides the guidance clients need to navigate every stage of their financial journey. Our approach centers on understanding each client’s goals, risk tolerance, and vision for retirement, allowing us to create tailored strategies that support both wealth accumulation and preservation.
At Mercer Financial Group, we believe retirement should be lived with confidence. Our mission is to empower clients with clarity, thoughtful planning, and trusted expertise so they can enjoy the financial security they’ve worked hard to achieve.
Learn more: http://www.mercerfg.com/
Recent News & Interviews:
- Shawn Mercer Discusses Inflation Rising Living Costs https://authoritypresswire.com/interview-with-shawn-mercer-founder-of-mercer-financial-group-on-the-influential-entrepreneurs-podcast-discussing-inflation-rising-living-costs/
- Shawn Mercer Discusses Market Volatility & Sequence-of-Returns Risk
https://authoritypresswire.com/interview-with-shawn-mercer-founder-of-mercer-financial-group-on-the-influential-entrepreneurs-podcast-discussing-market-volatility-sequence-of-returns-risk/
